Ethiopia tastes international bond markets

Ethiopia could be the latest African country to tap international bond markets for the first time, after mandating Deutsche Bank and JPMorgan to take it on a roadshow to meet investors this week.

Ethiopia is one of the poorest countries in the world, with a gross domestic product per capita of just $1,240 (adjusting for PPP) according to the World Bank. A successful issue would make it the second-poorest country ever to tap the international bond market, after Congo in 2007.

However, the International Monetary Fund predicts that the country’s economy will be the eighth-fastest growing in the world this year, and appetite for previously esoteric African bonds has been ravenous in recent years – luring countries including Kenya, Senegal and Rwanda to make their debuts.

JPMorgan and Deutsche Bank will be ushering a delegation of Ethiopian officials around Europe and the US starting on Wednesday, and a US dollar-denominated bond is expected to follow – possibly as early as next week.

The country is rated B1 by Standard & Poor’s and B by Moody’s and Fitch Ratings, deep into the “junk” range of ratings.